Overview

• U.S. producer prices rose 0.9% in July, the largest monthly increase since June 2022, driving headline PPI to 3.3% year-on-year.
• Markets slashed odds of a 50 bp Fed rate cut in September to zero while still pricing in over a 90% chance of a 25 bp reduction.
• Two-year Treasury yields climbed toward 3.73%, the 10-year yield neared 4.29%, and the dollar strengthened by roughly 0.5% as equities paused.
• Analysts attribute part of the wholesale inflation spike to higher tariff-driven import costs and warn of possible pass-through to consumer prices.
• The UK economy expanded 0.3% in Q2 but economists caution the preliminary figures are distorted by one-off factors and weak private demand.